Interactive tellers can cut costs and drive revenues

By :Martin Shires

August 04, 2015 08:58 AM

Technology is disrupting banking, but it is also helping banks to drive efficiency and make substantial cost-savings in their day-to-day operations.

One of the best examples of this is the interactive teller machine (ITM), which is growing in importance as a channel for serving customers. The customer just needs to touch the screen and a real employee at the bank’s ITM call center can take care of their needs.

“The ITM isn’t an ATM in the traditional sense of the word,” says Bert Watson, general counsel at United Bank, which has installed a number of these machines. “For example, instead of swiping their debit card, the customer keys in their account number and scans an ID card to verify their identity to the remote teller. Basically, anything you can do at a traditional teller counter, you can do at an ITM with the remote teller’s help.”

For the customer there are a range of benefits. For example, if they want to withdraw more than their daily ATM cash withdrawal limit the ITM teller can authorize it. In addition, it’s easy to cash checks for their exact amount.

For the bank, the machines help to drive revenues by freeing up tellers to sell more and deliver a better customer experience. United Bank has found 25 percent of its traditional teller transactions now go through the ITM, freeing up staff for redeployment into more profitable roles, such as finding mortgage or investment products for its customers. With the capability to more efficiently deploy the same teller resources, banks offer access to tellers through ITMs at expanded locations, days and hours.

Another area where the bank is seeing real efficiency gains is in costs.

For example, tellers do not need to count bills and balance their drawers every day, saving man hours. Meanwhile, the bank no longer needs to accept deposits at all of its ATMs, only enabling them to be made at the ITMs. This cuts out the daily process of visiting the ATM, collecting the checks and balancing the machine, according to Watson.

“But we don’t need to do that with the ITM, as it automatically gives us a net balance at the end of each day, eliminating the need to buy and sell cash from the vault. In fact, we are planning to move to visits every two weeks to our ITMs from weekly visits,” he explains in our case study entitled ‘NCR Interactive Teller Machines drive efficiency and cost-savings.’

All the efficiencies mean labor costs per transaction are 35-40 percent lower for the ITM than at United Bank’s traditional teller line.

The centralization of the teller brings the greatest efficiencies, as they can be managed to a level of consistency for service, skills and availability that individual branches cannot achieve.

Martin Shires is a global evangelist for branch transformation strategy, based out of NCR’s R&D center in Dundee, UK. Martin has held a number of senior regional management roles in European retail banking.